A. E. BADE, Pima County Assessor, Thomas Jay, Dennis Weaver and Peter Rubi, as members of and constituting the Board of Equalization and the Board of Supervisors of Pima County, Arizona, Carroll H. Christian, Pima County Treasurer, and William Stanford, Warren Peterson and Thad Moore, as members of and constituting the State Board of Equalization of Arizona, Appellants, v. Richard M. DRACHMAN, Fanchon Drachman and Campbell Plaza Co., a limited partnership, Appellees.
No. 2 CA-CIV 260
Court of Appeals of Arizona
Aug. 17, 1966
Supplemental Opinion on Denial of Rehearing Sept. 13, 1966
417 P.2d 689
MOLLOY, Judge
Review Denied Sept. 30, 1966.
Robert N. Hillock, Sp. Deputy County Atty., for Pima County, Tucson, for appellants Jay, Weaver and Rubi.
Darrell F. Smith, Atty. Gen., James D. Winter, Asst. Atty. Gen., Phoenix, for appellant, State Bd. of Equalization.
Boyle, Bilby, Thompson & Shoenhair, by Marvin S. Cohen, Tucson, for appellees.
Robert Corbin, Maricopa County Atty., Olgerd W. Kalyna, Sp. Deputy County Atty. for Maricopa County, Henry J. Florence, Deputy County Atty. for Maricopa County, Phoenix, for Maricopa County, as amicus curiae.
This appeal is taken from a judgment in the Superior Court of Pima County in favor of appellees (plaintiffs below) against ap
Plaintiffs Drachman are the owners of commercial real property and the improvements thereon and plaintiff Campbell Plaza Co. is the lessee of this property. The improvements consist of a shopping center, constructed in 1960. In 1963, the Pima County Assessor assessed for tax purposes all and in Pima County not subject to assessment by the State Tax Commission at 12 1/2 per cent of full cash value as determined by the Assessor while all realty improvements were assessed at 23 per cent of full cash value. The property which is the subject of this litigation was assessed for tax purposes in 1963 in accordance with these percentages. To determine the assessed value of improvements, the Assessor‘s method was to apply the percentage of 23 per cent to the actual cost of construction less a depreciation factor of 2 per cent per annum.
The complaint set forth two counts: Count I alleged that the intentional and systematic assessment for tax purposes of realty at 12 1/2 per cent of full cash value and of improvements at 23 per cent of full cash value was illegal and violative of constitutional and legislative mandates, and that said assessment constituted legal fraud to the extent of 44.34 per cent thereof by virtue of application of a higher percentage. Count II alleged that the method used by the Assessor to determine full cash value of improvements was illegal in that construction costs less depreciation is not equivalent to full cash value as defined by applicable statutes and that this arbitrary method of determining value discriminated against plaintiffs’ particular improvements.
The lower court granted plaintiffs’ motion for summary judgment as to Count I. Count II was submitted to the court on the basis of testimony taken at a hearing on plaintiffs’ application for a temporary injunction held on August 23, 1963.1 Final judgment on both counts was in favor of the plaintiffs, the court finding that the defendants had intentionally and systematically assessed property in Pima County by use of a discriminatory percentage of full cash value and that full cash value was determined by a systematic and intentional use of a discriminatory method of valuation (cost less depreciation). The trial court granted relief by enjoining the defendants from extending on either the 1963 tax roll or the 1963 assessment roll a valuation for the subject improvements in any amount greater than 12 1/2 per cent of $700,000.00, which sum the trial court found to be the full cash value of said improvements, and from collecting taxes against said improvements based upon any assessment greater than 12 1/2 per cent of $700,000.00. The defendant Carroll H. Christian, Pima County Treasurer, was further ordered to refund to the plaintiffs the sum of $5,220.40, which amount had been paid by the plaintiffs as taxes upon the subject improvements during the pendency of the action over and above the tax which would be due if the said improvements were assessed for the year in question at 12 1/2 per cent of $700,000.00.
There have been two opening briefs filed with this Court by the appellants which in toto postulate nine questions for decision on appeal. Several of these questions overlap while others are phrased in duplicitous manner. Accordingly, we think it best to state the questions raised as follows:
1. Under existing constitutional and statutory provisions is it lawful for a coun
2. Did the trial court err in granting injunctive relief for the reason that the taxpayer had an adequate remedy at law?
3. Did the trial court err in granting equitable relief in that such relief was in violation of
4. Did the court err in requiring responsible officials to assess plaintiffs’ property at a percentage (12 1/2 per cent) of its full cash value?
5. Is it lawful for the county assessor to use the cost of improvements less depreciation as the full cash value thereof?
6. Did the trial court err in setting a specific value upon the subject improvements rather than remanding the problem to the county assessor with appropriate instructions?
IS IT LAWFUL FOR THE ASSESSOR TO APPLY DIFFERENT PERCENTAGES TO THE VALUES OF DIFFERENT CLASSES OF PROPERTY?
Defendants contend that “from time immemorial” the Pima County Assessor, for ad valorem tax purposes, has taxed land value at “generally” 12 1/2 per cent of full cash value and improvements on realty at “approximately” 23 per cent of such value.3 There is no contention made that the percentages used in Pima County are the same as those used by other county assessors. The defendants contend that the court should not disturb long established administrative interpretations and practices. We do not believe that the existence of whatever long standing practices there may be as to these percentages ipso facto bars relief to a complaining taxpayer. In dealing with similar contentions, our Supreme Court in Southern Pacific Company v. Cochise County, 92 Ariz. 395, 377 P.2d 770 (1963) said:
Although the light of a legitimate grant of power for administrative action is
often quite dim, it may safely be said that a statute which gives unlimited regulatory power to a commission, board or agency with no prescribed restraint offends the Constitution as a delegation of legislative power. State v. Marana Plantations, [Inc.,] 75 Ariz. 111, 252 P.2d 87. What the legislature cannot do is to delegate to an administrative body or official not only the power to fix a rate of taxation according to a standard but also the power to prescribe the standard. Duhame v. State Tax Commission, 65 Ariz. 268, 179 P.2d 252, 171 A.L.R. 684. (92 Ariz. 404, 377 P.2d 777.) * * * * * *
“We do not find here an ambiguity and cannot countenance the wilful, systematic and intentional violation of the law no matter how long continued. To do otherwise would be to deny the equal protection of the law to appellant.” (92 Ariz. 406, 377 P.2d 778.)
We believe the Southern Pacific case, supra, disposes of this particular attack upon the judgment rendered below with the exception of the appellants’ reliance upon
We are unable to agree with the appellants. It is our opinion that if the legislature had intended to nullify the judicial pronouncements in the Southern Pacific case, it would have done so by repeal or amendment of the several existing statutes requiring assessment at full cash value. Southern Pacific held that there is a “general legislative scheme that assessments on all species of property shall be at full cash value.” (92 Ariz. 401, 377 P.2d 774) Among the statutes pointed out in the Southern Pacific decision as clearly requiring that all property be assessed at “its full cash value” are
“Ascertaining the percentage of full cash value at which the various types of property are assessed by the commission and by each of the county assessors * * *” (Emphasis added)
A.R.S. § 42-135, subsec. A, par. 2
If it was the intent of the legislature, contrary to our interpretation, to give blanket approval to whatever the practices of the various county assessors might be in this regard, then we believe such a statute would violate constitutional prohibitions against delegation of legislative power, under the Southern Pacific case, supra.
We conclude that the practice of the county assessor in using different percentages for different classes of property is a clear violation of the applicable law.
DID THE PLAINTIFFS HAVE AN ADEQUATE REMEDY AT LAW?
The appellants contend, as did the appellees in the Southern Pacific case, supra, and in McCluskey v. Sparks, 80 Ariz. 15, 291 P.2d 791 (1955), that the plaintiffs had an adequate remedy at law either under
The appellants further contend that the plaintiffs had an adequate remedy at law under
“C. After payment of the tax, an action may be maintained to recover any tax illegally collected, and if the tax due is determined to be less than the amount paid, the excess shall be refunded in the manner provided by this chapter.”
While this particular contention does not appear to have been directly dealt with by the McCluskey and Southern Pacific cases, this Court is disinclined to believe that our Supreme Court, in holding that the plaintiffs in those cases had no adequate remedy
“The order of the trial court dismissing plaintiff‘s first claim for relief is affirmed. [Suit for refund of taxes paid under protest.] It is reversed as to appellant‘s second claim for relief. [Suit for injunctive relief.] If appellant establishes the facts alleged in its second claim, the court below is directed to enter an injunction compelling action in compliance with this decision and from and after the taxable year in which the superior court enters injunctive relief appellant may pursue the statutory remedies for recovery of taxes occasioned by any further misapplication of the law to the assessment of its property.” (Emphasis supplied.) (92 Ariz. 407, 377 P.2d 779)
The reasoning of Southern Pacific in denying the recovery of taxes paid under protest is that:
“* * * [T]he refund of taxes paid is by virtue of governmental grace rather than by reason of any legal right * * *” (92 Ariz. 406, 377 P.2d 778)
McCluskey held categorically that “the plaintiffs have no adequate remedy at law.” (80 Ariz. 21, 291 P.2d 794) Whether the inadequacy of the remedy provided by
The appellants attempt to distinguish these decisions on the basis that the plain
It is not clear from McCluskey whether all taxpayers similarly situated were joined in that action.6 We believe, however, it is clear that not all of the taxpayers of the same class, if railroads are to be considered a separate “class“, were joined in the Southern Pacific suit. Nor do we believe that our Supreme Court intended to limit the individual equitable relief deemed appropriate in the Southern Pacific case to taxpayers who might constitute all or substantially all of a “class” of property. We believe the decision was intended to be a bold stroke at a time-worn but distasteful avoidance of the clear mandate of statutory law by taxing officials. As such, it is in line with the recent trend of decisions of courts throughout this country in being more lenient in granting relief to the individual taxpayer.7
DOES A.R.S. § 42-204 PROHIBIT THE EQUITABLE RELIEF GRANTED BELOW?
Appellants rely both on the original wording of
Appellants next argue that the amendment, effective long after the commencement of this action, which prohibits the issuance of an injunction to prevent the extending upon the tax roll of any assessment, invalidates the action taken below. We cannot agree with this contention. It is well established that a statute will have prospective operation only unless it appears that it was intended to have retroactive effect. Gallo v. Industrial Commission, 83 Ariz. 392, 322 P.2d 372 (1958); Employment Security Commission v. Arizona Citrus Growers, 61 Ariz. 96, 144 P.2d 682 (1944). While statutory changes in procedure may be applied to proceedings already pending as to future steps in the litigation, a statute whose effect is to eliminate the pending action altogether is not applicable to a pending action. Berkovitz v. Arbib & Houlberg, 230 N.Y. 261, 130 N.E. 288 (1921); Duncan v. Corson County, 38 S.D. 623, 162 N.W. 395 (1917); Spokane and E. Trust Co. v. Spokane County, 173 Wash. 699, 22 P.2d 656 (1933); Bank of Fairfield v. Spokane County, 173 Wash. 145, 22 P.2d 646, 650 (1933).
ARE THE PLAINTIFFS ENTITLED TO BE TAXED ON IMPROVEMENTS AT THE SAME PERCENTAGE AS THAT APPLIED TO THE VALUE OF BARE LAND?
The appellants contended below and on appeal that there is “no magic” in the 12 1/2 per cent figure arbitrarily selected by the assessor to be applied to the values established for bare land, and that if a 23 per cent figure is illegal, so is a figure of 12 1/2 per cent. With this contention we agree.
The plaintiffs’ right which is proposed to be violated by the defendants is to be taxed only to the extent of a fair share of the tax burden, uniformly and equally apportioned to the property valuations within the county. If the plaintiffs’ taxes are to be reduced so that there be levied upon these improvements a tax of only 12 1/2 per cent of their full cash value, then the court would be adding to properties which are not paying their fair share of the tax burden, to the detriment of all owners of property paying more than its fairly proportioned share. This follows from inescapable laws of apportionment. The Supreme Court of New Jersey, when faced with a similar problem, reasoned thus:
“Appellants claim their property was assessed for 1958 and 1960 above the ‘common level’ of assessments of other real property. In answers to interrogatories the city stated that ‘residential’ property was assessed in those years at a ‘common level’ of 40% of true value while ‘commercial and industrial’ prop
erties were assessed at a ‘common level’ of 70%. Appellants’ property is in the latter category. The Division of Tax Appeals ordered a reduction to 70% of true value. We certified the further appeals to the Appellate Division. “Appellants’ right to relief from the original assessments is not disputed. The sole issue is the measure of it. The city contends, and the Division of Tax Appeals agreed, that the reduction may not go below the level of assessment of other properties in the same class, whereas the taxpayers urge the assessment must be reduced to the level of the favored class, ‘residential,’ i. e., 40%. We are unable to agree with either view.
* * * * * *
“Hence, as to assessments made, the injured taxpayer is remitted to a different remedy, to wit, a reduction of his assessment to the ‘common level’ of assessments in the taxing district. The thesis is that the taxpayer is injured by so much of the tax bill as exceeds his pro rata share of the burden of local government. True, there may remain some residual harm in that the dollar value of the reduction may be recaptured in another year from all properties including that of the successful appellant. But perfect relief is inherently impossible. If the taxpayer pays no more than his fair share for the year in question, practical justice is achieved. Surely, if the taxpayer who appeals is permitted to pay less than his fair share, the injustice to those who were overassessed but did not complain would be compounded. Hence we held in Kents that an excessive assessment should be reduced to what it would have been if all taxable real property had been assessed equally. (Citations)
“None of the cases cited by the taxpayers supports the proposition that an excessive assessment should be reduced to the level of the most favored class when to do so would relieve the taxpayer of a part of his pro rata share of the total burden.”
Siegal v. City of Newark, 38 N.J. 57, 183 A.2d 21-23 (1962).
We find the overwhelming weight of authority in this country, in those jurisdictions which allow any relief at all to the “undervalued” taxpayer, to be that the taxpayer is not entitled to be taxed at the lowest percentage that he can point to, but rather at what would be his share of the tax burden if the taxing authorities were faithfully adhering to the clear mandates of statute. Among the decisions taking substantially this position are: Bemis Bros. Bag Co. v. Claremont, 98 N.H. 446, 102 A.2d 512 (1954) (“at the same ratio to its true value as the assessed value of all other taxable estate bears to its true value“); People ex rel. Hillison v. Chicago, Burlington and Quincy Railroad Co., 22 Ill. 2d 88, 174 N.E.2d 175 (1961) (“difference between its taxes for 1958 and the amount its taxes would have been had locally assessed property been equalized at full value“); People ex rel. Kohorst v. Gulf, Mobile and Ohio Railroad Co., 22 Ill. 2d 104, 174 N.E.2d 182 (1961) (“that proportion of the total tax which the true value of his property bears to the true value of all other taxable property in the town“); Hodges v. Town of Kensington, 102 N.H. 399, 157 A.2d 649 (1960) (“its share of the common tax burden“); Ainsworth v. City of Claremont, 106 N.H. 85, 205 A.2d 356 (1964) (“* * * plaintiff had to prove that his tax was greater than it should have been with respect to the taxes of other property owners“); In re Appeals of Kents 2124 Atlantic Ave., Inc., 34 N.J. 21, 166 A.2d 763 (1961) (“average ratio“); City of Orange v. Levingston Shipbuilding Co., 258 F.2d 240 (5th Cir. 1958) (“proving that had the proper basis been applied to the actual market value of taxpayer‘s property, the assessed tax would have been less“); State v. Federal Land Bank of Houston, 160 Tex. 282, 329 S.W.2d 847 (1959) (“[T]he taxpayer must prove that his taxes are excessive or substantially higher by virtue of * * * the failure to assess taxable property at its market value.“)
In support of their contention that they are entitled to be taxed at the lowest rate used by the assessor, the plaintiffs cite only the case of Shoppers’ World, Inc. v. Board of Assessors, 348 Mass. 366, 203 N.E.2d 811 (1965). In Note 10 to this decision, appearing at 203 N.E.2d page 820, we find dictum that would support this proposition.8 We do not find Shoppers’ World to be in point for, as we read the case, it is dealing with a situation where all properties in the taxing district were intentionally assessed at 45 per cent of fair cash value. This was the lowest and only percentage being used by the assessing authorities and accordingly, if equitable relief were to be granted, there would be no substantial inequity in using this figure. The Bettigole case, 343 Mass. 223, 178 N.E.2d 10 (1961), cited in support of the statement made in Shoppers’ World, is similarly not in point. The Bettigole action involved the sweeping relief of mandating taxing authorities to revise the entire taxing structure in the taxing district as to all properties therein so as to comport with the law. The relief granted in Bettigole would not knowingly grant to any taxpayer the right to be assessed at an amount less than a fairly apportioned share.
If these two lone decisions (Shoppers’ World and Hamm) are authority for the proposition that a taxpayer is entitled to be assessed at the lowest percentage used, then we reject this view and adhere to what we consider to be the better view. We do not believe that in an action addressed to the equitable powers of the court, the plaintiff is entitled to injunctive relief requiring the taxing authorities to impose upon property less than what would be its share of the taxes if the law were faithfully observed.
This phase of the case (Count I) went off on a motion for summary judgment. We believe there is a factual issue left to be resolved: In what amount, if any, were the plaintiffs injured by the unlawful practices of the defendants? Summary judgment having been wrongfully granted, this portion of the action must be returned to the trial court for further proceedings. Lujan v. MacMurtrie, 94 Ariz. 273, 383 P.2d 187 (1963).
MAY THE COUNTY ASSESSOR USE COST LESS DEPRECIATION AS AN ASSESSED VALUATION RATHER THAN “FULL CASH VALUE“?
The trial court found: “* * * The Assessor based his appraisal of full cash value strictly on the cost of construction of improvements, less 2 per cent per annum depreciation“.10
Though the appellants dispute that there was sufficient evidence in the record for the trial court to find that the defendants were using cost of construction less depreciation as the exclusive method of setting the value of improvements upon real estate, an examination of the record reveals substantially undisputed evidence to support such a finding. Even if disputed it would be the duty of this Court to resolve conflicts in the evidence favorably to the trial court‘s determination. Sulger v. Maslin, 90 Ariz. 70, 365 P.2d 1113 (1961).
We pass on to the question of whether the practice of using cost less depreciation as the exclusive criterion of assessed valuation is a violation of our law. Our Code defines full cash value as follows:
A.R.S. § 42-201 “1. ‘Full cash value’ means the price at which property would sell if voluntarily offered for sale by the owner upon such terms as property is usually sold, and not the price which might be realized if the property were sold at forced sale.”
Testimony at the hearing held below established that the plaintiffs’ investment in the shopping center in question was not returning the revenue that had been anticipated and that if the property were placed on the
The provisions in our law creating strong political and economic reasons for deviation from the clear mandate of taxing statutes are not unique to this state.11 The contention of the defendant assessor that he has the prerogative to select this one factor of cost less depreciation in arriving at cash value, like the other contentions of defendants, has been considered by the courts of other states on numerous occasions. The following cases hold that the ignoring of all factors affecting value other than cost of construction less depreciation or replacement cost less depreciation is a discrimination which may be corrected by legal proceedings when the method results in a substantial deviation from true value: May Stores Shopping Centers, Inc. v. Shoemaker, 151 Colo. 100, 376 P.2d 679 (1962); Alfred J. Sweet, Inc. v. City of Auburn, 134 Me. 28, 180 A. 803, 104 A.L.R. 784 (1935); Rowland v. City of Tyler, 5 S.W.2d 756 (Tex.Com.App.1928); People ex rel. New York Cent. R. Co. v. Thompson, 156 Misc. 536, 282 N.Y.S. 269 (1935); Bellingham Community Hotel Co. v. Whatcom County, 190 Wash. 609, 70 P.2d 301 (1937); People ex rel. Colgate Inn v. Assessors of Town of Hamilton, 132 Misc. 506, 230 N.Y.S. 134 (1928); Buhl Foundation v. Board of Property Assessment, 407 Pa. 567, 180 A.2d 900 (1962); Mahoney v. City of San Diego, 198 Cal. 388, 245 P. 189 (1926); Tuckahoe Woman‘s Club v. City of Richmond, 199 Va. 734, 101 S.E.2d 571 (1958); First & Merchants Nat‘l Bank of Richmond v. Amherst County, 204 Va. 584, 132 S.E.2d 721 (1963); Anderson‘s Red & White Store v. Kootenai County, 70 Idaho 260, 215 P.2d 815 (1950); In re Farmer‘s Appeal, 80 Idaho 72, 325 P.2d 278 (1958); City and County of Denver v. Lewin, 106 Colo. 331, 105 P.2d 854 (1940); De Luz Homes, Inc. v. County of San Diego, 45 Cal. 2d 546, 290 P.2d 544 (1955); Essex Co. v. City of Lawrence, 214 Mass. 79, 100 N.E. 1016 (1913). Among the judicial pronounce
“Replacement cost at a particular time, less depreciation constitutes one criterion, but not the exclusive criterion, to be used in determining cash value.
“The method used to determine the value of the improvements on plaintiff‘s property, [replacement cost less depreciation] or other properties of like kind and character could produce a result which would reflect the actual cash value. Conversely, it might not. Such an exclusive method of fixing cash value could result in an erroneous or discriminatory value.
“We conclude that the criterion or method used in fixing cash value exclusively at replacement cost of improvements * * *, less depreciation, whether used by the State Tax Commission or the assessor, is erroneous, and not authorized by law. Other criteria of value, such as income, location, cost, actual cash sale value, or other pertinent factors should have been considered in determining assessed value.” (325 P.2d 280)
Appellants have cited no contrary law. This being commercial property, it seems particularly appropriate that the income factor influencing value should at least be considered.12 Accordingly, we are of the opinion that if the plaintiffs have shown that they were injured by the practice in question, they were entitled to some relief
We have previously indicated that the plaintiffs had failed to show injury by merely showing disparity between the 23 per cent and 12 1/2 per cent figures used by the assessor. Like reasoning might lead us to the same conclusion insofar as the use of the arbitrary standard of cost less depreciation. If, for instance, this arbitrary method arrived at a value for all improvements in Pima County of 30 per cent or more above the full cash value thereof, then it could be argued that there would be no substantial detriment to the plaintiffs, for the tax imposed on plaintiffs’ improvements might be equal to or less than their proportionate share of the tax burden. There is no direct proof in this record that such is not the case and hence it might be argued that the plaintiffs have failed to prove injury. A Texas court has reached this result. Pierce v. City of Jacksonville, 403 S.W.2d 512, 518 (Tex.Civ.App.1966).
However, we consider this Texas decision to be unduly restrictive of the taxpayers’ remedies. We take judicial notice that costs of construction have generally been increasing rather than decreasing and that it is therefore probable that a method of using original cost less depreciation would usually result in a value less than current full cash value. The very presumption sometimes relied upon by taxing officials to the effect that they are presumed to have taxed property at full cash value until proven otherwise supports the inference that plaintiffs were injured to the extent they have shown their property to be valued at above its full cash value. People ex rel. Korzen v. Chicago, Burlington & Quincy Railroad Co., 32 Ill. 2d 554, 209 N.E.2d 649 (1965). We hold that the plaintiffs made a sufficient showing of injury so as to be entitled to judicial relief under Count II.
CAN A COURT IN AN EQUITABLE PROCEEDINGS DETERMINE THE FULL CASH VALUE OF PROPERTY FOR ASSESSMENT PURPOSES?
It is the appellants’ contention that it is the scheme of our statutory law that
We reject this contention as being overly litigious and defeating to the legitimate rights of wronged taxpayers. Our own Supreme Court, in an early decision, pointed in the direction of giving specific judicial relief to correct harmful discrimination in assessment practices:
“There should have been, in addition to the finding of fraudulent misconduct on the part of the board of equalization, a finding whether in fact the plaintiff‘s patented mines were overvalued, measured by the statutory rule of valuation; and the decree should have enjoined the collection of only so much of the taxes assessed as were based upon any such overvaluation as may have been thus found.” (Emphasis added) County of Cochise v. Copper Queen Consol. Min. Co., 8 Ariz. 221, at page 238, 71 P. 946, 951 (1903)
Most of the decisions hereinabove cited have held that judicial relief fixing the specific assessment or tax is merited when discriminatory practices are established. The appellants have cited no contrary authority.
The value of $700,000.00 was the lowest valuation placed upon the improvements in question with the exception of testimony of cost less depreciation. We hold that the trial court was justified in accepting this valuation as being the full cash value of the improvements for tax purposes for the year in question.
DISPOSITION
Though this action has been presented in two counts, and properly so from the standpoint of legal theory, we are actually dealing with only one assessment and one tax bill. Though we have come to the conclusion that the trial court properly adjudicated the matters presented to it
Under the holding of this decision, the valuation of $700,000.00 as the full cash value of the improvements in question has been judicially established for the taxable year 1963. We agree with the trial court that payments made by the plaintiffs during the course of this action for taxes upon these improvements, after the temporary restraining order had been denied as to Count II, were paid under protest. 84 C.J.S. Taxation § 635, page 1280; 51 Am.Jur. Taxation, § 1185, page 1019. The final relief granted in this action should abide the determination by the court of what the tax on an assessment of $700,000.00 on these improvements would have been if all properties in the county had been evaluated at full cash value. If such a determination indicates that the plaintiffs have overpaid their taxes, the amount of the overage should be ordered refunded.
Reversed and remanded for further proceedings.
KRUCKER, C. J., and HATHAWAY, J., concurring.
SUPPLEMENTAL OPINION ON MOTION FOR REHEARING.
MOLLOY, Judge.
The appellants have moved this court to reconsider its decision rendered in this case on August 17, 1966, advancing several grounds in support of their motion. All of these grounds have been previously advanced in the appellants’ briefs and were disposed of in the opinion written, with two exceptions. These pertain to the contentions made that this court should take judicial notice of the purported fact that the shopping center which is the subject of this
Immediately prior to the issuance of our decision herein, the appellants had filed a petition to strike and dismiss Count II of the plaintiffs’ complaint. This petition was denied by this court without an expression of its reasons for so doing. The grounds for this petition were the same as those now advanced on the motion for rehearing pertaining to the doctrine of judicial notice.
The motion for rehearing is accompanied with a copy of what purports to be a newspaper article in a local newspaper, dated June 17, 1966, which reports that there had been a sale of the Campbell Plaza Shopping Center for “* * * more than 1.2 million.”
Appellants now state:
“This Court in this opinion has taken judicial notice of the fact that construction costs from the time of trial to the present time have steadily increased. The Court, therefore, can also take judicial notice of the sale as it appeared in the newspaper.”
Other than whatever authority there might be in this reference to this court‘s own opinion in this case, there is no authority whatsoever cited by the appellants which remotely suggests that a private sale such as reported in the June 17, 1966, newspaper article is a proper matter for judicial notice.
We believe the following to be a proper statement of the law in this state as to matters of which judicial notice may be taken:
“In order for any tribunal, whether it be judicial or quasi judicial, to take judicial notice of any fact, it must be so notoriously true as not to be subject to reasonable dispute or must be capable of immediate accurate demonstration. (57 Harvard Law Review 273) A high degree of probability of the truth of a particular proposition cannot justify a tri-
bunal in taking judicial notice of its truth. (57 Harvard Law Review 274) A fact of which a court may take judicial notice must be indisputable. This being true it follows that evidence may not be received to dispute it.” Phelps Dodge Corporation v. Ford, 68 Ariz. 190, 196, 203 P.2d 633, 638 (1949)
Under this doctrine, our Supreme Court has sanctioned the judicial noticing of such well-known economic facts as that wages are increasing, Whyte v. Industrial Commission, 71 Ariz. 338, 227 P.2d 230 (1951), that there was a general business depression commencing in 1929 and continuing to the time of the opinion released in Taylor v. Kingman Feldspar Co., 41 Ariz. 376, 18 P.2d 649 (1933), and that real property in close vicinity to the riverbed of the Salt River has marginal value for residential purposes, City of Scottsdale v. Municipal Court of Tempe, 90 Ariz. 393, 368 P.2d 637 (1962). Under these authorities, we believe it not inappropriate that this court in its opinion took judicial notice of the rising costs of improvements on real estate.
However, we note that in our opinion we did more than merely take note of rising costs of construction, in that we postulated that because of such rising costs, “* * * it is therefore probable that a method of using original cost less depreciation would usually result in a value less than current full cash value.” Impliedly, we have by this statement assumed that a 2 per cent depreciation would be adequate to adjust for the decrease in full cash value of improvements resulting from obsolescence and other factors influencing depreciation. In this regard, we believe that we overstepped the permissible limits of judicial notice under the foregoing authority. The statement in regard to judicial notice is unnecessary for the opinion rendered, and accordingly we withdraw this statement pertaining to judicial notice from our opinion.
Under this doctrine of judicial notice, we believe that it would be completely improper for this court to take judicial notice of a
The appellants ask further that the decision rendered be made prospective only and that adequate time be allowed to the defendant-assessor in which to make the “transition.”
If we were modifying or overruling a previous judicial decision, or if we were ordering a complete revampment of the assessment rolls, a process that would require substantial time to accomplish, this request would have some merit. We are doing neither. We believe that the Supreme Court of our state made it crystal-clear in prior decisions of that court, particularly Southern Pacific Company v. Cochise County, 92 Ariz. 395, 377 P.2d 770 (1963), that the practice of arbitrarily assigning various percentages to the cash value of different classes of property in making assessments is a practice directly in violation of law. The Southern Pacific opinion was rendered in January of 1963. We do not believe that our opinion modifies or extends this decision as far as the use of percentages is concerned.
As far as the use of construction cost as the procrustean measurement of value, there have been no prior decisions in this
The motion for rehearing is denied.
KRUCKER, C. J., and HATHAWAY, J., concurring.